The New Export Intermediary's
What's the best way to make your first international sale? Ask any
salesman how to make a sale and he'll tell you to find a need (or better yet, a
want) and fill it.
In the case of the new export agent, broker, or export management
company, that is often interpreted as meaning "find an overseas buyer, then
locate a domestic supplier" to provide the product. New exporters frequently
contact me asking why suppliers in the U.S. won't work with them even when
they've already identified a buyer overseas. These fledgling international
traders mistakenly believe there is no future in exporting just because they
can't convince the U.S. supplier to take them on as their export
representative. Unfortunately, these would-be exporters are "backing in" to an
exporting sale. Let me show you what I mean.
Credibility is very important in international trade. Major
international deals are closed every day with just a handshake, a phone call or
even a fax message. I've had exporters tell me how overseas buyers sometimes
send big checks for products even when they've never worked with the exporter
before. Why? Because that exporter has credibility. He has a reputation. And
that reputation is as good as currency in international trade.
When the newcomer eyes a big future in international trade, he often
overlooks this simple fact. Why didn't the U.S. supplier hire our enthusiastic
export agent when he had a sale in his pocket? There could be lots of reasons.
Perhaps the manufacturer is already exporting. He may have his own export
department and finds his own leads. Maybe he knows that many leads are "dead on
arrival." Maybe he's decided that he'll take the lead uncovered by our
enthusiastic exporter and sell it himself, thereby pocketing the agent's
commission. Maybe the price of his product means it isn't even competitive in
the overseas market.
But most likely the small to mid-sized manufacturer is intimidated by
exporting. He's worried about language problems and currency transfers. He's
heard about letters of credit and how complex they are. He doesn't know
anything about shipping. He's fearful of civil wars in that far away land and a
hundred other things he doesn't understand or hasn't considered. Most
importantly, he doesn't have any faith in the exporter who wants the company to
hire him. Our eager export agent hasn't left the company president with a warm
feeling that he will take care of him in the international marketplace. As a
result, the company president is unsure. And he's not willing to take a chance.
TO DO IT RIGHT!
Let's see how another new export intermediary might have done it better.
He knows from reading and initial research that U.S. exports are in demand
around the world and particularly in the (fictional) overseas country of
Verbibia. Maybe he was stationed there in the service or perhaps he already has
business contacts from his current job. He might even have relatives in the
country. He knows the language, the people and the customs. While our new
exporter knows nothing at all about widgets (the product produced by the U.S.
supplier), he has the good sense to conduct a little research where he
discovers that Verbibians are big importers of U.S. widgets and widget
accessories. He finds out the market is small but growing.
When the export agent approaches the small widget manufacturer, he has
something to offer. No, he hasn't lined up a buyer but he knows there is a
viable market in Verbibia and he has the contacts to put together a deal. In
short, he has credibility with the supplier. He doesn't run into the supplier's
office waving an offer to buy in front of the company president. Instead, he
asks intelligent questions about the cost of widgets. He asks about the
quantity the company can supply and how quickly they can build them. He looks
into product quality and the need and availability of overseas servicing. These
are the things our new export agent is worried about. He's not concerned about
language, currency, shipping and payment because he has experts who are ready
and willing to help with these matters.
The manufacturer is impressed. He's pleased to see the export agent has
done his homework and has already identified a market in an overseas country
where the exporter has both contacts and familiarity. The manufacturer
particularly likes the part where the export agent explains there is little
risk because no widgets will be shipped until a buyer has been identified and
the letter of credit to pay for the widgets is being forwarded. Before he goes
any further, the agent signs a contract with the manufacturer outlining the
terms of their agreement.
This is a story that will probably have a happy ending. And there are
other variations that would have worked just as well. Maybe the new exporter
has been a widget salesman before or perhaps he has some other business or
personal relationship with company officers that gives him credibility. Maybe
he's already made some export deals and he's comfortable in the international
marketplace. The important thing is to gain credibility with the supplier. Do
that by taking advantage of an edge you enjoy.